European Central Bank delays strengthening stimulus until Dec.

President says institution is looking at ‘everything’ in its policy tool box

The European Central Bank held off from strengthening its current economic stimulus but its president, Christine Lagarde, said there was “little doubt” that more action would be coming at its December meeting as surging coronavirus infections aand new restrictions on activity threaten t Europe’s economy.

Lagarde said Thursday that recent data show the economy “is losing momentum more rapidly than expected” and that there had been “a clear deterioration in the near term outlook.”

The bank’s staff is already wworking on a “recalibration” of t the bank’s stance ahead of the Dec. 10 meeting, said Lagarde.

“We have little doubt ... that tthe circumstances will warrant t the recalibration and the imple- mentation of this recalibration,” Lagarde said.

its The position bank’s in promise December to review came in an unusual introductory paragraph to its regular statement about bond purchases and interest benchmarks. The ECB said it will assess the dynamics of the pandemic and prospects for vaccine rollout as well as new staff estimates about inflation and growth. That would lead to “a thorough reassessment of the economic outlook” at the Dec. 10 meeting. Lagarde said that “we are looking at everything” across the bank’s set of policy tools such as interest rates, bond purchases and cheap loans to banks. As expected the bank made no change to its pandemic emergency bond purchase program wworth 1.35 trillion euros ($2.10 trillion), which pumps newly created money into the econommy to keep credit flowing to businesses and promote economic activity. Those regular purchases are set to run through the middle of next year. AAnalysts believe that is one rea- son the bank could take no action Thursday, since there already more stimulus still in the pipeline. The ECB’s key goal is to raise inflation toward its target of below but close to two per cent, the level considered best for the economy. Inflation was -0.3 per cent in September, partly a result of temporary measures such as a value-added tax cut in Germany but also a sign of weaker than optimal demand. Economy output plunged 11.8 per cent in the 19 countries that use the euro in the second quarter, but is estimated to have rebounded in the July-September months by as much as10 per cent as businesses reopened. Figures for the quarter are to be released Friday.

Prospects for the last three months of the year have worsened as infection numbers have risen, raising the possibility of more anti-coronavirus restrictions. Germany ordered restaurants, bars and theatres to close their doors Monday, and to keep them closed until December, under what is being called “lockdown light.”

Chancellor Angela Merkel warned w speech of in a “parliament difficult winter” Thurswa inm day.